Luke Blair: Council mergers are a question of personality

Mergers and acquisitions are undergoing what analysts call a 'modest recovery' at the moment. Globally the rate of growth in deals is strong, but absolute levels of activity remain subdued.

Luke Blair: It takes two to tango
Luke Blair: It takes two to tango
Meanwhile in the public sector, the merger market is doing rather better. Hospital trusts and primary care trusts are amalgamating, schools are consolidating and even some major councils are talking about getting together to share services.

And with the localism bill published this week, the pressures on councils to share services and cut costs will be even greater.

The difference is that in the private sector, M&A activity is seen as generating profit.  In the public sector, it’s all about savings.

Plans to merge councils are therefore couched not in the language of global conglomerates but in the town hall speak of ‘providing high quality services while driving costs down’.

In London currently there are talks ongoing between the big three central boroughs – Westminster, Kensington & Chelsea, Hammersmith & Fulham – and between Waltham Forest and Haringey, up in North London.

The logic seems sensible.  At least two of those councils have been sharing some posts and services for some time now, in areas where you might think the challenges of the job – for example, running the transport network – would be unmanageable on such a large scale.  In fact they have been managed well, and efficiently.

Haringey and Waltham Forest now say they want to share ‘back office’ functions like legal services, benefits, call centres, organisational development and property management, amongst others.

The councils would remain distinct entities in their own right, staying locally rooted and politically accountable to their current ward constituencies.  So local democracy would remain strong, while the economies of scale could save hundreds of millions.  

Radical, perhaps, but also logical.  And the new localism bill makes this argument even more apposite.

But wait a minute – what’s this? – Camden and Islington have now called a halt to exactly the same idea, and are not now progressing with talks to merge their services announced earlier this year.

Ostensibly the merger has been called off due to analysis which showed the costs of redundancy through staff reductions would be much greater than any money saved, certainly in years one and two of any merger.

The media say it is all to do with personalities and politics. Camden’s Moira Gibb, one of London’s longest serving and most respected borough chief executives, is said by Local Government Chronicle to have had a ‘major clash’ with Islington’s Labour leader Catherine West. Politically, Islington’s trendy lefties are also reported to have been less enamoured with the more centre-left Camdenites.

Whatever the real reason, this does serve to illustrate that rather tired old adage that it takes two to tango. And when you think of councils like Westminster and Kensington & Chelsea, although they are both blue as blue can be, they are also poles apart in terms of character and personality (and politics too, in some ways).

Communications of course is the means by which these organisations express their character and personalities. The extraordinary diversity of personality between London’s 33 local authorities, all of them claiming to share only three political colours between them, is a tribute to local government PR and communications in the capital.

But ironically, it is this very difference of personality which might in the end stall some of these mergers. Council mergers, or any other mergers come to that, don’t work just as a marriage of convenience.   

As any organisational expert will tell you, bringing together two corporate entities will only work if both sides get on, and are mutually supportive, in what they do and say.  It takes two to tango, but it also takes two to argue.   

Luke Blair is a director at London Communications Agency

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